For Weather, Partly Sunny

In January, when IBM bought the Weather Co. for about $2 billion, it acquired digital assets including weather.com and its popular app—but not the cable channel. It was dark and stormy for the Weather Channel, a stand-alone network in a consolidating TV environment. For four months in 2014, Weather Channel was off DirecTV in a noisy carriage fee dispute. To return to those millions of subs, Weather had to agree to make programming changes, most importantly dropping the long-form reality shows the network was counting on to bring in higher ratings.

The change was fine with Dave Shull, Weather Channel CEO. He had similar complaints about the network’s programming in his previous job on the other side of the table as head of programming acquisition for Dish Network.

“We had, candidly, sort of lost our way,” Shull says. “The original programming generated good Nielsen ratings but didn’t come back to that core brand promise of the Weather Channel.”

Shull says the network—owned by a group of investors including NBCUniversal and private equity funds—did some basic consumer research. “It was pretty clear that what viewers wanted from the TV network was storm coverage,” he says.

For the Weather Channel, mornings are primetime, Shull says, so in November, the network changed its early programming, with everyone on the show being a meteorologist. And for the rest of the schedule, long-form programming that wasn’t directly about weather was eliminated.

“We finished September with our live programming up 79% from a year before—and that was before Hurricane Matthew,” Shull says. Weather Channel’s Matthew coverage reached 59 million people.

Without the long-form shows, overall ratings are softer, but advertising rates are up, he says. Without the digital component of the company, the ad sales staff is focused on selling TV spots.

One media buyer notes Weather Channel’s ratings are still relatively small but the net is probably benefiting from a strong market that is pushing brands, especially consumer packaged goods, to look for more efficient inventory.

SNL Kagan expects Weather Channel’s revenue from ads and distribution to drop slightly to $330 million for 2016 as its subscriber count shrinks, with cash flow flat at $133 million.

Weather Channel is big on selling ads with weather triggers, selling fruit on days that are expected to have high humidity, for example.

In a skinny-bundle world, the net might appear vulnerable, but Shull is pursuing an over-the-top strategy anchored by its Local Now product, which is driven by its ability to deliver localized weather, news, traffic and ads to distributors looking to avoid the high prices asked by broadcast affiliates. “We’re leading the charge with regard to reinventing ourselves,” says Shull.

In January, when IBM bought the Weather Co. for about $2 billion, it acquired digital assets including weather.com and its popular app—but not the cable channel. It was dark and stormy for the Weather Channel, a stand-alone network in a consolidating TV environment. For four months in 2014, Weather Channel was off DirecTV in a noisy carriage fee dispute. To return to those millions of subs, Weather had to agree to make programming changes, most importantly dropping the long-form reality shows the network was counting on to bring in higher ratings.Subscribe for full article